IT MAY BE TIME TO BUY A HOME COMPARING BASELINE COSTS, ADVICE CAN HELP WITH DECISION

Even if homeownership appears to be a good bet in the overall scheme of investments, does it make sense for you?

Numerous sources can help you sort out the decision for yourself, including financial planners, personal bankers and even the real estate agents and mortgage originators that are involved in the process.

Any analysis of the housing purchase as an investment decision must start with a comparison of the baseline costs of obtaining shelter. For most, that comes down to looking at rental payments vs. mortgage payments.

You can start with whatever you are paying in rent today or, if you are a current owner, whatever you think the average rent might be for an apartment that would allow you to live for the most part as you do in your home.

Say the average rent for a two-bedroom apartment in your neighborhood is $700. You might have renters' insurance and utility bills; your landlord pays the taxes and maintenance.

A two-bedroom starter townhouse might cost $100,000. If you bought the townhouse with 20 percent down and obtained a 30-year, fixed-rate mortgage for the balance at 8 percent, your monthly principal and interest payment would be $587. Figure taxes at another $200 per month. You also have utility and insurance bills.

Then consider that Uncle Sam is willing to subsidize your home purchase by allowing you to deduct the mortgage interest and real estate taxes you pay, a deal not available to renters. In a 28 percent tax bracket, the value of that largesse amounts to about $220 per month in the early years when virtually all of a mortgage payment is going toward interest.

Maintenance is one of the key sticking points. Homeowners have all kinds of repairs, and they can be costly. They can also add to the value of the home.

Most experts agree that homeowners likely will pay enough in upkeep to just about wipe out their tax savings initially. So, not counting the value of appreciation, the decision may look like a wash, coming down to a lifestyle choice as much as anything.

But there are two things to keep in mind: Whereas your rent is going to rise each year that you do not own, your principal and interest payment remains fixed if you're an owner without an adjustable rate mortgage. And each month that you make a mortgage payment, you are building more equity in your purchase, a process that can act as a forced savings account, albeit at zero interest.

Now comes the crux of the matter for those who disagree on housing as an investment: What appreciation can you reasonably expect on your home and how is that going to compare to an alternate resting place for your money?

If home values are rising at 5 percent per year, a figure that is holding up for the Midwest, then your $100,000 townhouse will be worth $105,000 in a year. Your balance sheet would reflect a 5 percent increase on a $100,000 asset.

But you would have only had to spend $20,000 to get it, giving you an actual return on cash of 25 percent. (This assumes you would have spent the same after taxes for owned housing as you would have spent without a tax break for rent.)

In the second year, the townhouse is now worth $110,250. In two years, your $20,000 investment has returned better than 50 percent. Year three: $115,762. Year four: $121,550. You have now doubled your money -- on paper.

Could you turn $20,000 into more money in four years somewhere else? Sure. But it could also turn into less, much less. Or it could disappear altogether, if you are really careless.

It's true that prices could tumble for your townhouse, too. Or buyers could become scarce, leaving your equity stuck because you can't sell to get it out. In either of those cases, having kept the $20,000 down payment in a 3 percent money market account might have been the investment choice.

But any analysis of buying a home simply on financial grounds is going to fall short. Because the risk/reward equation for housing cannot be rooted in money alone.

There are intangible benefits to homeownership that defy any fiscal rationale: taking pride in a neighborhood, building a stake in a community, controlling one's own living space. These points have been used by real estate agents and home builders to sell their products for 50 years.